A Red Flag Raised for Korean Economy
Memory prices are dropping more sharply than expected. DRAM prices fell by a double-digit percentage for two consecutive months for the first time in history. NAND flash prices also fell most steeply since 2014.
In February, DRAM prices fell 14.5 percent from the previous month to US$5.13 per unit (DDR4 8Gb DRAM), said semiconductor market researcher DRAMeXchange on Feb. 27. The price drop was the second biggest following January's 17.24 percent. DRAM prices have plummeted 31.7 percent since the beginning of this year.
NAND prices have also fallen sharply. In February, NAND prices slid 6.64 percent from the previous month to US$4.22 per unit (128Gb MLC NAND flash). It was the sharpest drop in five years since the 11.14 percent drop in February 2014.
For two consecutive months, memory semiconductor prices dropped more sharply than industry expectations. This is because memory buyers are delaying their purchases, believing that memory prices will continue to decline in the first half of this year, while demand is expected to remain sluggish until the end of the first half of this year. In particular, industry experts say that demand from China, which is the largest consumer of memory semiconductors, shrank in the aftermaths of the United States-China trade dispute.
A red flag was raised for the Korean economy as the memory semiconductor market appeared more sluggish than expected. Korea’s semiconductor exports recorded drops for two consecutive months in December of last year and January of this year. In particular, semiconductor exports dropped 23.3 percent in January, the largest decrease since the 26.2 percent drop in April 2009 when semiconductor exports were directly hit by the global financial crisis. Semiconductors account for 20 percent of Korea's total exports.